subject: How To Decrease The Motor Insurance Premium? [print this page] A vehicle is an asset for the buyer but only buying a vehicle won't serve. One must get auto insurance policy for their vehicles. Vehicle Insurance is one of the most important factors to be considered while buying a new car. Car insurance is a way to protect the car owner financially from all the risks involved while driving on road. Motor insurance India is mandated by the government that every car plying on road should be insured.
While looking for motor insurance quotes, we find that auto insurance is clubbed with huge discounts and freebies to lure more customers. The most attractive being 'free insurance'. The word 'free' attracts maximum attention from buyers but there are hidden clauses in it, which are not disclosed at first. In such case, free insurance provided is only for a year and from second year onwards, it is policyholder's responsibility to pay the premium and get their policy renewed. Besides, the free policy may not include various types of damages, such as that by floods. Below are some of the ways by which we can reduce the insurance premium:
Voluntary deductible: A deductible is the part of monetary loss that is borne by the insured. Deductible consists of two components i.e. voluntary and compulsory. A compulsory deductible of RS 500 would mean that you pay RS 500 of the claim amount, while the company pays the rest. You can reduce the premium if you opt for an additional voluntary deductible. However, this also means that when a loss occurs, you will have to pay a large portion of the claim amount out of your own pocket.
No Claim Bonus: Every insurance provider provides no claim bonus if car insurance claim is not made during any year of the policy. This benefit is provided in the subsequent year in which no car insurance claim is made. This can help you bag a discount of 20-50% on your premium from the second year onwards. However, since you lose this advantage if you make a claim, avoid making small claims, especially when the amount is lower than your premium.
Safety devices: While obtaining motor insurance quotes and buying motor insurance online, we can report safety devices installed in the vehicle which can help you in getting discounts from the insurance provider.
Insured declared value: Insured declared value or IDV is the market value of the car. An auto insurance premium is calculated on the basis of declared value. Higher the insured declared value, higher the premium and vice versa. So, one can save few bucks by declaring a relatively low value as it does not impact amount of claims also.
by: Addy Brown
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